SG Market (26 Sep 13)

SG Market: S’pore shares are poised for another struggle as Wall Street slump to its longest decline since Dec on a possible government shutdown, debt default and softer economic data. Investors fretted over two looming deadlines in Washington as the House and Senate remained in gridlock over funding issues that are set to expire on 1 Oct and a federal borrowing limit being reached by 17 Oct. Adding to the pressure, US durable goods rose just 0.1% in Aug, after a sharp drop in Jul, while new home sales but the pace of 421,000 units was near its low end this year due to higher mortgage rates. If the psychological 3,200 level on the STI fails to hold, next support lies at 3,168 (50-day moving average) with overhead resistance at 3,275. Stocks to watch for: *OUE: Group is considering listing a commercial Reit on SGX mainboard, with an initial portfolio comprising OUE Bayfront office property and its adjacent F&B tower building and a link bridge with retail shops. The proposed Reit may include other commercial properties owned by Lippo China Resources. *SingTel: Seven telco firms, including M1 and StarHub has urged the regulator to reject SingTel's proposed $126m acquisition of OpenNet, which is developing the next generation nationwide broadband network, over concerns over competition issues. *MIIF/Pan United Corp: MIIF has completed the sale of its 38% stake in Changshu Xinghua Port to Pan United Corp for $112.2m and will distribute a capital return of 9.7¢ per MIIF share by 29 Oct. Following the divestment, MIIF has issued a final 2H13 DPS guidance of 0.8¢, based on the expected income from remaining asset, Hua Nan Expressway. *Internet Technology Group: Major shareholders, the Goh brothers, who currently control 61.4% of ITG under familt investment vehicle Ossia Holdings, has made an exit cash offer of $0.127, representing a 7.6% premium over its last closing price of $0.118, and a proposed a voluntary delisting. The exit offer and delisting will be subject to approval by a majority of at least 75% of the shares present at an EGM to be convened, and not being voted against by 10% or more of the shares. *OKH Global: Entered into non-underwritten placement agreement with UOB Kay Hian to issue up to 60m new shares @ $0.68 each, which would raise $39.5m. The placement price represents a 8.4% discount to the weighted average price for trades done on 24 Sep. *Asia Fashion: Terminated its MOU relating to the proposed acquisition of An Kang City Han Bin District Guishan Stone Coal Mine and An Kang City Chengxing Mining Co after due diligence review. Meanwhile, the group has reached settlement agreement of Rmb461.5m with 8 customers on compensation claims amounting to Rmb517m for defective goods that failed to meet specified colour requirements. A Rmb300m cash compensation will be paid by Dec 13 and the remaining Rmb161.5m will be deducted from future fabric sales over next 5 years. As at Jun, group has cash reserves of Rmb356.6m. *Sky One Holdings: Extended the long-stop date of its proposed acquisition of Energy Prima via the issue of 1.6b new shares @ $0.25 and disposal of existing transport and logistics business to CEO Dicy Suen to 30 Jun 2014. The proposed RTO will transform the group into a coal mining player. *RH Petrogas: Drilling of Zircon-1 exploration well in the Salawati Kepala Burung PSC, Indonesia has reached total vertical depth of 1,525m on 25 Sep and logging operation has commenced. Oil shows were encountered during drilling. Production testing will follow if log analysis confirms the presence of hydrocarbon zones. After completion of Zircon-1, the rig will move to drill the Koi-2 appraisal well. *Lippo Malls Trust: Issued $150m 3-year medium term notes (MTN) bearing a fixed rate of 4.25% per annum, drawn down from its $750m Guaranteed Euro MTN Programme. This will be the fourth draw-down by the trust on the MTN Programme established on 25 Jun 2012, with $275m remaining. *Hu An Cable: Announced that it is considering to undertake a third TDR programme for the issuance of 151.7m new shares to underlie 121.4m TDRs to be listed on the Taiwan Stock Exchange. *Synear Food: Closing date of exit offer extended from 25 Sep to 30 Sep.